2002/03/11 – Putting City Hospitals on Firmer Footing

The New York Times

March 11, 2002

Putting City Hospitals on Firmer Footing By JENNIFER STEINHAUER

Since Mayor Michael R. Bloomberg is looking to cut more than $4 billion from the city’s budget, now is perhaps not the most logical time for a city commissioner to be talking about expanding services. But that appears to be the central goal of Dr. Benjamin K. Chu, the city’s new Health and Hospitals Corporation president.

When Mr. Bloomberg chose Dr. Chu to take over the city’s hospital system, he set up the first smooth transition in a decade for the corporation, where leaders had left under fire or in a fog of scandal, usually only to be replaced by other short-timers.

Dr. Luis R. Marcos, the corporation’s longest-serving president, stepped down in January after a six-and-a-half-year tenure, during which he staved off Mayor Rudolph W. Giuliani’s efforts to privatize the corporation and balanced its budget with less financial help from the city.

But now, as the corporation faces its second straight year of losses and a continuing stream of uninsured patients, Dr. Chu is making the remarkable decision to add programs and try to improve service at the corporation’s 11 hospitals and 85 community clinics.

Rather than focus on where to cut, Dr. Chu plans to push for a bigger market share in various areas of care and to attract and keep paying patients by adding new clinical services backed up by aggressive marketing, much as the city’s private, nonprofit hospitals have done for years. A result, he hopes, will be increased revenue.

»The truth of the matter is,» Dr. Chu said in a recent interview, »there are a lot of services needed in the community and it is up to us to help them get them.» He added, »If you cut and cut and you don’t build services, you miss out on not only providing services but also on possible revenue providers that help support the mission of the hospitals.»

After several years of operating in the black, the city’s hospital system ended its last fiscal year with a $72 million deficit, and is set to finish the current fiscal year about $200 million short. The corporation shares many of the same woes as the rest of the hospital industry — reduced reimbursement rates from managed care companies, smaller government subsidies and a decrease in the number of patients, who now get more of their care in outpatient settings.

But New York’s public hospital system — the largest in the nation — also serves the largest share of the city’s uninsured patients, many of them ineligible for any public insurance program. Roughly 10 percent of patients at the hospitals and 30 percent at the clinics have no insurance.

By making a concerted effort in the last few years to enroll more eligible patients into Medicaid — the system’s uninsured patients fell from 560,000 in the 2000 fiscal year to 490,000 in 2001 — and by cutting costs throughout the system, the corporation managed to stave off greater losses. A new government insurance program, Family Health Plus, which will insure many families that earn too much to qualify for Medicaid, will further help the corporation.

However, this will not fully offset notoriously low Medicaid reimbursements at its clinics or the cost of serving illegal immigrants and other patients who do not qualify for insurance. Additionally, with the mayor’s proposed budget calling for nearly a $40 million reduction in city payments for certain of the corporation’s services, the hospital system is still facing major financial trouble over the coming fiscal year.

Dr. Marcos, the previous president, was constantly frustrated by reminders from advocates for the poor and uninsured that his system had a mission to care for those in need — it was politically impossible for him ever to close an underused hospital or shutter a medical clinic — coupled by his inability to wring more cash from Albany or Washington. »The toughest challenge is to convince people that the wonderful mission of the corporation costs money,» Dr. Marcos said recently.

In cutting about 30 percent of the corporation’s work force, paring services and leaning on hospital administrators to find efficiencies, Dr. Marcos managed to keep his balance sheet under control, but did not necessarily improve the reputation of the hospitals’ clinical services, or please advocates. »If you want to do a great job here, you have to be willing to take risks and burn bridges,» he said recently.

Dr. Chu, who, the son of Chinese immigrants, used the public hospitals as a child, said he was now charged with improving them. This includes adding badly needed services and reducing the emergency room waiting time that upsets patients and often causes them to never return to a public hospital. »I always tell people that we need to treat patients like you want your mother to be treated,» said Dr. Chu, who has spent much of his career working with the corporation.

Before his appointment as president, he was senior associate dean at Columbia University College of Physicians and Surgeons, where he managed the university’s contract with Harlem Hospital, which is part of the corporation’s system. He also had several management positions in the corporation, was once acting New York City health commissioner and served on various medical faculties.

Among the initiatives that Dr. Chu believes the corporation should be adding are screening programs for colon cancer and for cardiac diseases, allowing earlier detection of problems and more referrals to the public hospitals for treatment. Although a large percentage of patients in the public clinic system fall into groups that suffer from heart disease, very few such patients opt to get treatment at public hospitals. »We are not out there trying to intervene,» Dr. Chu said. »I can’t say there is any area of services I want to cut back on.»

How to pay for all this? Like executives at the private, nonprofit hospitals, Dr. Chu believes that public hospitals need advertising campaigns for their services as well as fund-raising efforts that appeal to wealthy donors. If other hospitals can give naming rights to wings of their centers to those with deep pockets, why not the city’s hospitals, he reasons, which is in keeping with the Bloomberg administration’s desire to forge private/public partnerships.

Dr. Chu said he would also personally lobby for increased reimbursements from the government insurance programs, and look carefully at how the corporation does its billing, to make sure it is doing all it can to collect its fees.

Dr. Chu will almost certainly be judged by Mr. Bloomberg, who is deeply interested in public health, in balancing the mission of the public hospitals with the fiscal realities. »Dr. Chu is a good physician with a very big heart,» said Dr. Marcos, who once taught Dr. Chu. »He is into new programs and improving outpatient care, which needs improvement. At the same time, I will say he will have to work very hard to maintain the financial structure of this corporation.»

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